The CNN report exposes the escalating cost of college education, especially at top US universities, is outpacing average American savings and earnings. This disparity, along with the increasing dependence on student loans and decreasing state funding for education, has led to a significant drop in Americans’ confidence in higher education. Despite the decreasing net cost of college, concerns persist over the long-term impact of soaring education expenses.
In 2022, an average American was able to save $5,011, a sum that would take approximately 75 years to accumulate into an amount sufficient to fund a single child’s education at a top U.S. university, CNN reported. The rising costs of higher education, especially at prestigious institutions, are exacerbating this financial challenge, it added.
The report showed that last year, the average private college tuition in the US increased by roughly four percent, reaching a little below $40,000 annually, as per the US News & World Report. In-state public school costs amounted to $10,500, with an annual increase rate of 0.8% for in-state and about one percent for out-of-state students.
Elite universities often come with a heavier price tag. For instance, Harvard University’s yearly tuition and fees for undergraduates stand at $57,246. Adding in additional costs such as housing, food, books, and other living expenses, the annual expenditure reaches approximately $95,438.
The Education Data Initiative revealed that since 1963, college tuition has witnessed a staggering increase of 747.8 percent, after adjusting for inflation. A study from the Georgetown University Center on Education and the Workforce reported that the overall cost of an undergraduate degree rose by 169 percent between 1980 and 2020. On the contrary, earnings for workers aged 22-27 only rose by 19 percent during the same period.
Consequently, Americans’ faith in higher education is plummeting. A recent Gallup poll disclosed that only 36% of Americans trust in higher education, a drastic drop from eight years ago.
Catharine Hill, an economist and the former president of Vassar College, attributes the rising college costs to the increased value of skilled workers – faculty and administrators – in the economy. Due to the traditional approach of higher education delivery, which involves a faculty member teaching 20 to 40 students, there have been minimal efficiency gains to lower these costs.
The financial disparity in the US has only intensified since the 1970s. In 2021, the top 10 percent of Americans owned nearly 70 percent of US wealth. This income gap allows top-ranked universities to charge premium prices, with wealthy families readily capable of paying them. However, this shifts a significant financial burden onto less privileged students, who are then forced to rely on student loans.
Despite the rising sticker prices, the actual amount that families spend on education has seen a decrease. College Board data reveals that the real price paid for private colleges has fallen by 11 percent over the past five years, while for public colleges, it dropped by 13 percent.
Nevertheless, the long-term implications of rising education costs remain a concern. Last month, the Supreme Court stalled President Joe Biden’s student loan forgiveness program, hindering millions from receiving up to $20,000 in federal student debt relief. With $1.6 trillion in outstanding loan debt in the US, the affordability of higher education continues to be a pressing issue.
